Wednesday, August 10, 2011

Standing issues in MHL TEK, LLC v. NISSAN MOTOR CO.

A bad day for MHL TEK at the CAFC.

As to the district court:

The defendants again moved to dismiss MHL Tek’s claims concerning the ’496 and ’966 patents for lack of standing, this time asserting that Animatronics had assigned the patents to ME.2 The district court agreed, finding that Animatronics had assigned any rights it had to the ’496 and ’966 patents when the Patent Assignment was executed in November 1993. Standing Op. II at 405. It found that the ’496 and ’966 patents were directed to an overall TPMS and therefore were not subject to the carve out provision for patents related to Animatronics Proprietary Technology. Id. at 410. The district court also rejected MHL Tek’s argument that the Patent Assign- ment was contingent on ME’s performance under the Development Agreement. Id. at 405-06. The district court found that “[u]nder the contracted terms, the par- ties clearly intended for title to all ‘patents issued for the TPMS’ to pass to ME upon execution of the [D]evelopment [A]greement, as well as the [P]atent [A]ssignment . . . .” Id. at 406 (citation omitted).

The law of standing:

Determining whether a party has standing to sue is a question of law, which this court reviews de novo. Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d 1372, 1376 (Fed. Cir. 2000). To have standing, (1) “the plaintiff must have suffered an ‘injury in fact’”’ (2) “there must be a causal connection between the injury and the conduct com- plained of”; and (3) “it must be ‘likely,’ . . . that the injury will be ‘redressed by a favorable decision.’” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (cita- tions omitted). In an action for patent infringement, “[t]he party holding the exclusionary rights to the patent suffers legal injury in fact under the statute.” Morrow v. Microsoft Corp., 499 F.3d 1332, 1339 (Fed. Cir. 2007) (footnote omitted). The party bringing the action has the burden of establishing that it has standing to sue for infringement. Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1317 (Fed. Cir. 2010) (citation omitted).

The carve-out issue:

MHL Tek does not dispute that the claims of the ’496 and ’966 patents are “inventions and discoveries set forth in the [Parent] Application.” J.A. 847, ¶ 2. Yet MHL Tek maintains that these patents were not assigned to ME because they are subject to the “carve out” provision of the Patent Assignment.


When the inventors assigned the Parent Application to Animatronics, they assigned “the entire right, title and interest, domestic and foreign, in and to the inventions and discoveries in [the Parent Application].” Audi’s Mot. to Dismiss Ex. 3-B (Nov. 21, 2007) (D.I. 89-5) (emphasis added). Similarly, the Patent Assignment states that “Animatronics does hereby assign to [ME] the entire right, title and interest . . . in and to the inventions and discoveries set forth in the [Parent] Application.” J.A. 847, ¶ 2 (emphasis added). Thus, the resolution of MHL Tek’s standing to assert the ’516 patent depends on whether the inventions claimed therein are the “inven- tions and discoveries” set forth in the Parent Application.

The CAFC noted:

The assignments, how- ever, make the relevant comparison between the claims of the ’516 patent, which define the inventions claimed therein, Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (“[T]he claims of a patent define the invention . . . .” (citation omitted)), and the specification of the Parent Application, which describes the inventions disclosed therein. See 35 U.S.C. § 112 (“The specification shall contain a written description of the invention . . . .”). Thus, so long as the written description of the Parent Application “reasonably conveys to those skilled in the art,” see Ariad Pharms., Inc. v. Eli Lilly & Co., 589 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc), the invention claimed in the ’516 patent, the ’516 patent was assigned to Animatronics and then to ME.
The specification of the Parent Application supports the claims of the ’516 patent, meaning that it is within the “inventions and discoveries” in the Parent Application and was therefore assigned to ME.


The Patent Assignment very specifically defines the system that comprises the Com- munications Link. It would be contrary to the language of the assignment to decide that something with fewer than these components is the same thing as the system itself. Furthermore, to the extent that the ’516 patent concerns anything, it concerns the Sensor Unit, which is clearly not included in the “carve out” provision.
Because the invention claimed by the ’516 patent was covered by the assignment of August 5, 1993, to Anima- tronics, which then assigned it to ME, the agreements of June and July 2007 by the inventors failed to assign the ’516 patent to MHL Tek. Therefore, MHL Tek lacks standing to assert that the ’516 patent is infringed, and its claims asserting infringement of that patent must be dismissed. Moreover, we vacate the district court’s grant of summary judgment of non-infringement as to the ’516 patent.

Conclusion: we affirm the decision of the district court holding that MHL Tek lacks standing to assert the ’496 and ’966 patents; we reverse the district court’s decision holding that MHL Tek has standing to assert the ’516 patent;


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